So Cal Housing Blues…

[JES]

The common theme that I hear is, “I refuse to believe the nightmare scenario that the bottom is going to drop out and we will lose 20-30%.” So easy to accept 20% gains for five years in a row, but heaven forbid you even suggest that the market could correct a mere 20%. Even worse when you approach them with solid facts all you get in response is the above line with nothing to back it up.

Psychology plays a huge role in this market and involves greed, denial, refusal to accept data that doesn’t back up a preconceived belief. Confirmation bias I believe it is called. Not only is the data on sales, inventory, ARMS etc. bad right now, but psychologically the market is a mess with most people either not aware or flat out denying that a crash will even happen.

My advice is to wait it out, or consider moving to a city where you can make your same combined salaries but buy a $275,000 palace.

[cabinboy]

Relax. You’re reaping the benefits right now. You’ve fixed it up and you have a nice living situation near L.A. at 24! Most people still have beer can furniture at your age. Buy her a ring. Get married. Have a kid. Your kids won’t know the difference between renting and owning until they are 10 years old. That gives you at least 10 years and 9 months before you have to impress anyone you care about by owning a house.
If you really want to see what life is like with a mortgage and property taxes, force yourse to put $2500 in a jar for 12 months. It might help you appreciate how nice you have it now.

[SD Realtor]

Common theme here eh?

1 – Wait wait and wait!

2 – Save money… save more money…put it in a CD and build up as much cash as you can. Set a goal and try to make it happen. Once you get in the habit of putting aside even a few hundred a month, you will see how easy it is.

3 – Buying a home with someone who is not your spouse is not advised. Perhaps in another 2 years home prices will be closer to the bottom of the market, but more important perhaps you guys will be married!

In the long run those with patience to make prudent investments based on pure data and market analysis rather then emotions always do better.

[Peace]

“The house is my girlfriend’s parent’s house and is to be used as a big chunk of their retirement when that time comes”

OK, are your future in-laws planning on selling the house to cash out for retirement?

If so, how bout you guys make a deal with them that you want the house as an inheritance and you will give them an advance for the value.

Could you afford the house at the time of their demise? Is this a neighborhood you would like to raise your family?

What I’m getting at is that your future wife and you can inherit the Prop 13 property taxes your in-laws are paying. If your in-laws have owned this home for a long time (and the value doesn’t crash below what they paid for it) you could set yourself up to save the proverbial sh**-load of $$ in future property taxes.

And of course as soon as they lay eyes on their grandchildren they will want to give you two a smoking deal.

[barnaby33]

Come on Waiting Hawk, if the couple makes 65k a year thats likely not going to happen. There is alot of good advice to be had about waiting and learning to time the bottom of the market on this board. Then the best advice is earn more money, 65k will be cutting it close, even when things do melt down.

A condo is a more realistic first purchase at that income level, if as the poster says he doesn’t want to get down to no free income.

Josh

[Raybyrnes]

With Your incomes you might very well qualify under the affordable housing guidelines. Builders have had to set aside 15% of new units or pay fees. Many pay the fees but there are opportunities out there in some of the most desirables areas. I would have never imagined that a family with close to 100K of income could qualify for affordable housing but they do. This is not to say there are not some strings attached but often times you will own for less then you rent and will have the tax deduction aswell. I had an opportunity at 950 square feet in Carmel Valley that would have cost me about $1400 a month to own with 5% down. This includes insurance taxes and HOA. The seller Flaked out at the last minute. I’ll wait for the next deal to present itself.

[ocrenter]

precurser, just to let you know, you are in fine company. folks with annual income of over $200,000 are also renting and waiting. yet there are still quite a few folks making $30,000 getting into homes after looking at super-low monthly payments based on 1% teaser rate that expires 6 months later. follow the smart money and wait!

[mydogsarelazy]

Hi precurser,

You are so fortunate to have found this board. You are getting some awesome advice here.

I have one sure-fire investment for you.

If it is possible, and the house you are in is large enough, you and your girlfriend should take on a boarder. I know, this can be annoying, but I used to have a place near USC in LA and I had USC students as roomates that I found in the Daily Trojan. Seriously, I had some wonderful people living in my back room.

Then take the rent (say $500 per month?) put it in a joint savings account and let two years go by.

You will have more than $12,000 saved, you will have watched the price of housing go down and when you do buy a place you will have extra dollars for movers, repairs, furnishings, landscaping etc.

In this economy dull, cautious investments are the only ones to make!

JS

[mydogsarelazy]

Hi precurser,

You are so fortunate to have found this board. You are getting some awesome advice here.

I have one sure-fire investment for you.

If it is possible, and the house you are in is large enough, you and your girlfriend should take on a boarder. I know, this can be annoying, but I used to have a place near USC in LA and I had USC students as roomates that I found in the Daily Trojan. Seriously, I had some wonderful people living in my back room.

Then take the rent (say $500 per month?) put it in a joint savings account and let two years go by.

You will have more than $12,000 saved, you will have watched the price of housing go down and when you do buy a place you will have extra dollars for movers, repairs, furnishings, landscaping etc.

In this economy dull, cautious investments are the only ones to make!

JS

[Author]

Posts